The federal government may never be able to process offshore drilling permits as quickly as it did before last year’s oil spill unless it gets millions of dollars to fund new oversight, Interior Secretary Ken Salazar said Wednesday.

AP photo

Interior Secretary Ken Salazar

The Obama administration has asked Congress to give $358 million to the Bureau of Ocean Energy Management, Regulation and Enforcement to step up its work policing offshore drilling. That would be a $119 million boost over what the agency got last year, and under the White House’s budget plan, much of it would be paid for by new fees on oil and gas companies who seek to drill offshore.

Salazar said that the speed of permitting those offshore projects hangs in the balance.

“So much of it depends on this budget,” he told reporters, after testifying before the Senate Energy and Natural Resources Committee. “If we don’t get the horsepower to be able to process permits under what is now a greater degree of scrutiny, we may never return to the pre-Macondo rate of permitting. If we get resources and can move forward with the robustness of this agency there is a lot of work to be done.”

Salazar’s comments mark an escalation in the administration’s bid to get more money and resources for the ocean energy bureau, by clearly tapping into the oil and gas industry’s zeal for more offshore drilling permits.

Industry representatives have been complaining for months that the government is moving too slowly in vetting proposed offshore drilling projects and only just approved a deep-water well blocked by a moratorium on some exploration that was lifted in October.

But industry trade groups have also come out strongly against new inspection fees that could help pay for the improvements. The American Petroleum Institute, the Independent Petroleum Association of America and other organizations insist that the money should come out of the billions of dollars oil and gas companies already send the federal government annually in royalties and bonus bids.

President Barack Obama’s budget request proposed new and higher “user fees” for permit processing and annual inspections, as well as fines on idle, non-productive leases. According to the administration, the proposed offshore inspection fees would raise $65 million in the 2012 fiscal year that begins Oct. 1, up from $10 million in fiscal 2010.

The administration also said inspection fees for onshore oil and gas leases would raise an estimated $38 million in fiscal 2012 — enough to nearly offset the $40 million the Bureau of Land Management spends annually managing its compliance inspection program.

Sen. Lisa Murkowski, R-Alaska, warned that the fees could discourage new production — at a time when crude oil is hovering around $100 a barrel and unrest in the Middle East threatens to push prices higher.

“There are serious questions about the wisdom of the proposed increases in so many taxes and fees across the board on the energy companies we’re responsible for regulating,” Murkowski said.

And Murkowski signaled she wasn’t buying the argument that more fees would translate into quicker permit processing. She said she wasn’t convinced “that’s really more likely to result in the law being carried out in the expeditious manner Congress has demanded. Given the deeply troubling situations in Libya, Bahrain and Iraq, there is little, if any, patience for continued delay in bringing back our American energy production and the associated jobs.”

In testimony before the Senate panel today, Salazar said the fees — which he termed “cost recovery” tools — were essential to continuing to overhaul the former Minerals Management Service and make improvements at the ocean energy bureau.

“If we do not have a robust agency that can oversee the development and production of our oil and natural gas resources in the nation’s oceans, then we will be setting ourselves up to continue the 30 years of neglect (that plagued the former Minerals Management Service),” Salazar said. Salazar said the administration’s budget plan “will allow production in a robust way where we can expedite permitting and also ensure the right kinds of inspections, so we are protecting the environment and we are protecting the people of America.”

The administration’s proposal for new user fees isn’t unique to the oil and gas industry. Similar charges also have been proposed for natural gas and other pipelines as a way to fund the Pipeline and Hazardous Materials Safety Administration.